Trade Setup: Nifty Eyes 22,000 After Wednesday's Surge; HDFC Bank Leads Nifty Bank Rally

The Nifty 50 broke records on Wednesday as it not only surpassed its previous peak of 21,593 but also closed above the 21,600 mark, marking an all-time high close. The December Futures and Options (F&O) series have proven to be the best-performing one for the Nifty 50 in 2023, with a remarkable gain of over 1,500 points, following a substantial 1,200-point surge in November.

The bulls are back in action, signalling a bullish trend for the market. Despite some caution due to the India VIX touching a new multi-month high, market experts predict further upward movement.

A significant contributor to the recent Nifty rally has been the Nifty Bank, with heavyweight HDFC Bank leading the charge. Overcoming resistance at the 48,000 mark, the Nifty Bank closed above it for the first time since December 15, reflecting the strength in the banking sector.

Looking at the Futures and Options (F&O) cues, Nifty 50's December futures witnessed a substantial 13.1% increase in Open Interest on Wednesday, with rollovers currently at 64.7%. The Nifty Bank December futures also added 13.4% in Open Interest, closing the series at 64.7% rollovers. The Put-Call Ratio for Nifty 50 now stands at 1.42, up from 1.23 earlier.

Stocks in focus include Balrampur Chini, Delta Corp, and Hindustan Copper, which are out of the F&O ban, while RBL Bank and NALCO remain restricted. The Nifty 50 Call strikes between 21,700 and 22,000 show increased Open Interest for the December 28 expiry, with the 21,700 strike seeing the maximum addition. On the Put side, strikes between 21,500 and 21,600 have witnessed added Open Interest for today's expiry.

As we head into Thursday's trading session, several stocks are poised to make headlines:

JSW Steel: CEO announces capex exceeding Rs 1 lakh crore for capacity expansion.
South Indian Bank: Board approves raising Rs 1,750 crore through a rights issue.
Sula Vineyards: Sets a new single-day revenue record, reporting Rs 2.28 crore over December 23-25.
Petronet LNG: Signs agreement with Gopalpur Ports to establish an LNG terminal on the east coast.
Canara Bank: In-principle approval for the IPO listing of its mutual fund subsidiary, Canara Robeco Asset Management Company.
IndusInd Bank: CCI approves the acquisition of a controlling stake in Reliance Capital.
NTPC: Aiming for an IPO of its green vertical in the next 1-2 years, says CMD Gurdeep Singh.
Zomato: Receives a Show Cause Notice from Directorate General of GST Intelligence over alleged tax liabilities worth Rs 401.7 crore.
KPI Green: Board meeting on December 30 to consider a bonus issue of shares.
Ramky Infra: Approves the sale of 100% shareholding in Visakha Pharmacity Ltd. for Rs 288.36 crore.

In the global arena, most Asia-Pacific markets resumed trading after the Christmas break. The Nikkei 225 is down 0.7%, while South Korea's Kospi opened 0.2% higher. Hang Seng's futures point to a positive start, indicating a favourable opening for the Indian market.

In the US, modest gains were observed in mid-week trading, with the S&P 500 nearing a record high. The Dow gained 0.3%, achieving a fresh closing high. The GIFT Nifty is trading with a premium of nearly 70 points from Nifty Futures Wednesday close, suggesting a gap-up start for the Indian market.

With the Nifty 50 eyeing the 22,000 mark and the bullish sentiment prevailing, the Indian stock market continues to offer an exciting and promising close to the year 2023. Investors are advised to stay vigilant amidst potential volatility.